West Virginia Gov. Jim Justice has offered a $300 million payment and half the value of his family coal businesses to settle loans from the now-defunct Greensill Capital, according to people familiar with the deliberations.

The proposal is part of talks between the governor’s family business, Bluestone Resources Inc., and Credit Suisse Group AG, which manages investment funds that were Greensill’s main source of cash for its lending business.

Mr....

West Virginia Gov. Jim Justice has offered a $300 million payment and half the value of his family coal businesses to settle loans from the now-defunct Greensill Capital, according to people familiar with the deliberations.

The proposal is part of talks between the governor’s family business, Bluestone Resources Inc., and Credit Suisse Group AG, which manages investment funds that were Greensill’s main source of cash for its lending business.

Mr. Justice’s heavily indebted family businesses were thrown into turmoil by Greensill’s collapse. He and his family borrowed $850 million from Greensill and he said in June the outstanding loans were “a burden on our family beyond belief.” Mr. Justice and his family members personally guaranteed the loans.

The second-term Republican governor and his family control a sprawling collection of mining, agricultural and real-estate assets, including West Virginia’s famed Greenbrier Resort—host to past PGA Tour events—a casino and medical clinic.

He has had to juggle managing the state’s response to the Covid-19 pandemic with his family’s debt woes. Earlier this month, Mr. Justice settled a long-running dispute with another lender, Carter Bank & Trust, in which the two sides agreed to restructure $368 million in loans.

At a news conference Monday, Mr. Justice said Credit Suisse and his family members led by his son, Jay Justice, Bluestone’s chief executive, are “working together really really well.”

Mr. Justice said the coal business is “doing fantastic” and his “family finances are great.” Coal prices have risen in recent months.

Mr. Justice has said his family used the Greensill loans to rebuild Bluestone after buying it back in 2015 from a Russian mining company.

In the talks with Credit Suisse, Mr. Justice’s companies have offered to pay Credit Suisse $300 million, the people said. It would source the money by refinancing a chunk of the existing loans with a third-party lender. It couldn’t be learned who the lender for the transaction would be.

Mr. Justice would also pledge to pay half of the proceeds to Credit Suisse of a sale or initial public offering of Bluestone, the family company that operates coal mines and that took the loans. Any sale would have to take into account the company’s debt load, the people said.

Credit Suisse has said in notices to investors that Bluestone owes it nearly $700 million. The Wall Street Journal has reported that Bluestone owes the remainder of what it borrowed from Greensill to creditors of Greensill’s banking unit in Bremen, Germany. Bluestone in a lawsuit filed against Greensill in March said the company already paid around $108 million in fees to access the $850 million in financing.

“Credit Suisse Asset Management is doing everything we can to maximize recovery for our fund investors,” said a Credit Suisse spokesperson. “If outstanding debtors put proposals to us, we will of course look at them.”

Greensill sold the majority of the Bluestone loans to investment funds managed by Credit Suisse. The $10 billion supply-chain finance funds extended financing to a range of borrowers, but the bank froze the funds in March when Greensill lost a key type of insurance that backed up its loans. Greensill shortly after tumbled into bankruptcy.

Credit Suisse said Monday the funds will have returned $6.3 billion to investors by this week and had another roughly $700 million in cash. Besides Bluestone, the bank earlier this year identified metals magnate Sanjeev Gupta’s GFG Alliance and failed construction startup Katerra as problematic borrowers.

It isn’t clear how much Bluestone would be worth in a sale. Mr. Justice sold the company in 2009 to Russian metals and mining company Mechel in a cash-and-stock deal worth more than $400 million. Mechel also assumed around $132 million in net debt, according to an announcement at the time.

In 2015, the Justice family bought Bluestone back in a deal that included a cash payment of $5 million plus royalty payments on future coal sales. It also owes Mechel 10% of the proceeds of any sale of the company.

Write to Julie Steinberg at julie.steinberg@wsj.com